Mr. Go, a contractor who won the bid for the construction of a public highway, claims as an expense, facilitation fees which according to him is a standard operating procedure in transactions with the government. Can Mr. Go deduct the amount paid as a facilitation fee? Briefly explain.
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Mr. Go, a contractor who won the bid for the construction of a public highway, claims as an expense, facilitation fees which according to him is a standard operating procedure in transactions with the government. Can Mr. Go deduct the amount paid as a facilitation fee? Briefly explain.
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- During the current year, a government buys land for $80,000. Which of the following is not true? Choose the correct.a. The land could be reported as an asset by the business-type activities in the government-wide financial statements.b. The land could be reported as an asset by the governmental activities in the government-wide financial statements.c. The land could be reported as an asset by the proprietary funds in the fund financial statements.d. The land could be reported as an asset by the governmental funds in the fund financial statements.The state government passes a law requiring localities to upgrade their water treatment facilities. The state then awards a grant of $500,000 to the Town of Midlothian to help pay for this cost. What type of revenue is this grant?a. Derived tax revenue.b. Imposed nonexchange revenue.c. Government-mandated nonexchange revenue.d. Voluntary nonexchange transaction.ABC Cooperative paid municipal taxes and license fees to the city government unaware that under a new law it was exempt from all taxes and government fees. Later, ABC Cooperative learned of its exemption and sought to recover from the city government the taxes it paid. Question: Can ABC Cooperative recover the taxes it earlier paid to the city government? Why or why not?
- The City of Wilson receives a large sculpture valued at $240,000 as a gift to be placed in front of the municipal building. which of the following statements is true about reporting a revenue in connection with this gift? Choose the correct.a. A revenue will be reported.b. Revenue is reported but only if the asset is reported.c. If the asset is not capitalized, no revenue should be recognized.d. As a gift, no revenue would ever be reported.The state government passes a law requiring localities to upgrade their water treatment facilities. The state then awards a grant of $500,000 to the Town of Midlothian to help pay for this cost. What type of revenue is this grant? Derived tax revenue. Imposed nonexchange revenue. Government-mandated nonexchange revenue. Voluntary nonexchange transaction.Marvin is a state legislator. Bases on his belief that a certain infrastructure project in the public’s best interest, Marvin in favor of the project. Several weeks later, a contractor who financially benefited from the project approaches Marvin with an envelope full of cash and thanks him for his “public service.” If Marvin accepts the cash, which of the following best describes his violation? A. Official bribery. B. Commercial bribery. C. Illegal gratuity. D. Economic extortion.
- A local citizen gives the City of Salem a painting by Picasso to display in city hall. Assume that the city does not choose to report the painting on the government-wide financial statements as a capital asset. Must the city report a revenue for the gift?Joe operates a business that locates and purchases specialized assets for clients, among other activities. Joe uses the accrual method of accounting, but he doesn’t keep any significant inventories of the specialized assets that he sells. Joe reported the following financial information for his business activities during this year.Determine the effect of each of the following transactions on the taxable business income. Required: a. Joe has signed a contract to sell gadgets to the city. The contract provides that sales of gadgets are dependent upon a test sample of gadgets operating successfully. In December of this year, Joe delivers $12,000 worth of gadgets to the city that will be tested in March of next year. Joe purchased the gadgets especially for this contract and paid $8,500. b. Joe paid $180 in July of this year to entertain a visiting out-of-town client. The client didn’t discuss business with Joe during this visit, but Joe wants to maintain good relations to encourage…1) State whether each of the following items should be classified as taxes, licences and permits, intergovernmental revenues, charges for services, fines and forfeits or miscellaneous revenue in a governmental fund. a) Sales and use taxes levied by the government. b) Payments by citizens for use of the city pool. c) Building permits to construct a deck at a residence
- The City of Wilson receives a large sculpture valued at $240,000 as a gift to be placed in front of the municipal building. Which of the following is true for reporting the gift within the government-wide financial statements?a. A capital asset of $240,000 must be reported.b. No capital asset will be reported.c. If conditions are met, recording the sculpture as a capital asset is optional.d. The sculpture will be recorded but only for the amount paid by the city.The Commissioner has the authority to prescribe real property values subject to limitations set by the law. Which of the following limitations is invalid? The adjustment in the FMV of the property must be done once in every three years through the rules and regulations issued by the Secretary of Finance based on the current Philippine Standards. The adjustment shall be published in newspaper of general circulation in the province, city or municipality concerned. There must be consultation with competent appraisers both from the private and public sectors, with prior notice to affected taxpayers In the absence of provision stated under letter c, the adjustment must be posted in the provincial capitol, city or municipal hall and in three (3) conspicuous public places therein.Joe operates a business that locates and purchases specialized assets for clients, among other activities. Joe uses the accrual method of accounting, but he doesn't keep any significant inventories of the specialized assets that he sells. Joe reported the following financial information for his business activities during this year. Determine the effect of each of the following transactions on the taxable business income. Required: Joe has signed a contract to sell gadgets to the city. The contract provides that sales of gadgets are dependent upon a test sample of gadgets operating successfully. In December of this year, Joe delivers $12,000 worth of gadgets to the city that will be tested in March of next year. Joe purchased the gadgets especially for this contract and paid $8,500. Joe paid $180 in July of this year to entertain a visiting out-of-town client. The client didn't discuss business with Joe during this visit, but Joe wants to maintain good relations to encourage additional…
